Amidst the holiday hubbub of celebrations, shopping, and other seasonal events, the convenience of credit cards lend themselves to greater usage. These seasonal temptations are in addition to the ongoing needs of many low to moderate income families that turn to credit cards for unexpected family needs.

But before reaching for that plastic plate this year, consumers should be warned to remember some subtle and serious changes in how credit card terms are rapidly changing.

In recent weeks, many cardholders have received written notices of changes. The small print of the advisories and language that is anything but easy to understand, leave many consumers unaware of how using their cards can lead to debt that could last a lot longer than the holidays. Most of the announced changes take effect this year. If no written rejection of the changes has been received by the due date indicated by the issuer, consumer silence is the same as acceptance.

It was earlier this year and in reaction to a groundswell of consumer complaints across the country that Congress took unprecedented steps to reform how the industry operates. Ceding to card issuer requests for adequate time to adapt to the new standards, Congress agreed to grant a few months for issuers to administratively adjust.

Yet it now seems that credit card issuers have instead rushed to implement card account changes before the new federal law takes full effect. Issuers who have announced card account changes that take effect in 2009 could effectively rob consumers of real reform in 2010.

For example, interest rate increases ‘at any time and for any reason’ were a key component of the changes that Congress intended in its reform. But what should have been a practice of the past will continue for many. The growth of variable floor rates will mean that more consumers will suffer rate increases at the issuer’s whim. They are also a blatant avoidance of an important reform.

Another recent development is the number of issuers who are discontinuing fixed rate interest cards and turning to variable interest rates that are tied to the prime rate. Some issuers do this in a way that provides a profit floor with no ceiling or cap. In an even more deceptive distortion of variable rates, some issuers include language that allows them to pick the highest prime rate in a 90-day period – rather than in a single day of a billing cycle. This specific issuer practice is also known as ‘pick-a-rate’. These and other subtle but important language changes are at the crux of a new research report by the Center for Responsible Lending. Dodging Reform, released December 10, reviews in detail how credit card issuers are boldly acting in their own self-interest and to the detriment of families holding more than 400 million credit card accounts. The report identifies and assesses the pick-a-rate practice and seven others that all circumvent the new federal law. Additionally, the report describes each of the practices examined, such as minimum finance charges, fees for balance transfers and cash advances, inactivity fees, and minimum finance charges and also summarizes each trend’s economic efficiency or the lack thereof, and consumer knowledge.

The sum of CRL’s exhaustive review concludes that these changes are really tricks and traps that have no correlation between revenues and costs. To review the full report online, visit: http://www.responsiblelending.org/credit-cards/research-analysis/.

How best consumers can manage their credit is a personal decision. However a few tips might help: Avoid exceeding your credit limit; once transactions surpass the stated limit, a series of fees and penalties are added to your balance.

Pay your bills by the stated due date; mail your payments early enough to reach the lender by the printed date on the statement.

Read every credit card statement carefully; should you not understand a charge, or believe a payment has not been accurately posted, call your credit card issuer’s toll-free number immediately. If your concern is not resolved with the issuer, remember that every state attorney general has consumer responsibilities and can investigate formal complaints.

Use cash instead of credit for frequent purchases such as groceries or gas.

Limit card transactions to expenses that can be repaid within a single billing cycle.

Consider switching your credit card use to a small regional bank or credit union that you have a personal relationship with. Often because they value the overall banking relationship, they have more consumer-friendly terms. However, you will still need to check their terms closely as well.

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